STOCK MARKET BEARISH -- SHORT -- CAUTION

Keybot the Quant flipped to the short side at the opening bell today. The higher volatilty and lower copper price pushed the algo to turn bearish.  Interestingly, the financials and retail collapsed at the open today, moving into bearish territory as defined by the quant, but they recovered in the opening minutes.  Nonetheless, the XLF and RTH are two of the four sector pillars supporting the equities markets so the weakness is important.

The last move resulted in a flatish outcome for the model, Keybot the Quant gave back a half percent and the actual trading gave back a percent. Caution is warranted for today and tomorrow since a whipsaw move would not be surprising.

Volatility wants to stay above 30 and copper price should maintain weakness after the China PMI number overnight, thus, watch the following four sectors to see if any of the levels fail; XLF 12.95, RTH 107.25, SOX 371.50 and UTIL 439.  If any of these fail, the market sell off will increase substantially. If not, the down move will moderate and the broad markets will move sideways. 

11/20/11; 7:00 PM EST =

11/17/11; 9:00 AM EST =

11/13/11; 7:00 PM EST =

11/6/11; 7:00 PM EST =

11/4/11; 9:00 AM EST =

11/1/11; 9:30 AM EST = -8; signal line is 0; go short 1233; (Benchmark SPX for 2011=-2.0%)(Keybot this trade=-0.4%; Keybot for 2011=+26.0%)(Actual this trade via DIA=-0.9%; Actual for 2011=+35.6%)

10/31/11; 7:00 PM EST EOM = +22; signal line is -1

10/31/11; 12:42 AM EST = +22; signal line is -2

10/31/11; 12:21 AM EST = +6; signal line is -3

10/31/11; 11:27 AM EST = +22; signal line is -4

10/31/11; 10:53 AM EST = +6; signal line is -5

10/31/11; 10:42 AM EST = +22; signal line is -6

10/31/11; 9:30 AM EST = +6; signal line is -8

10/30/11; 7:00 PM EST = +36; signal line is -9

10/28/11; 10:00 AM EST = +36; signal line is -11

10/27/11; 11:59 AM EST = +36; signal line is -13

10/27/11; 9:30 AM EST = +22; signal line is -15

10/26/11; 3:59 PM EST = +6; signal line is -17

10/26/11; 3:47 PM EST = -8; signal line is -18

10/26/11; 3:31 PM EST = +6; signal line is -18

10/25/11; 10:00 AM EST = -8; signal line is -20

10/25/11; 9:30 AM EST = -8; signal line is -20

10/24/11; 10:34 AM EST = +6; signal line is -21

10/24/11; 9:30 AM EST = -8; signal line is -23; go long 1238; (Benchmark SPX for 2011=-1.6%)(Keybot this trade=-2.7%; Keybot for 2011=+26.4%)(Actual this trade via MYY=-3.8%; Actual for 2011=+36.5%)